Insurer Held Accountable for Misleading Explanation of Policy to Elderly Traveller
Insurer Held Accountable for Misleading Explanation of Policy to Elderly Traveller
The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.
An elderly gentleman, who submitted a claim on behalf of his injured wife, has successfully resolved his dispute against his insurance company.
The Australian Financial Complaints Authority ruled in favor of the complainant, finding that he had been misled into thinking he had coverage.
The claim was initiated after the man's wife had a severe fall down a flight of stairs during their trip to Thailand. She sustained multiple injuries, including a fractured hip and head trauma, which required her to be hospitalized for more than three weeks. Additionally, to ensure a safe journey back to Melbourne, the claimant had to purchase a business class flight for his wife, allowing her to lie flat and minimize the risk of complications.
Zurich Australia denied the claim based on the policy's exclusion of overseas medical expenses for individuals over 80 years old. However, Zurich claimed to have offered an "upgrade" to the policy, providing medical coverage for individuals over 80, which the claimant did not opt for.
The complainant obtained the policy through a local branch of his bank, referred to as CB, which offered it as a benefit for specific credit card holders. At the time of purchasing the policy, both the complainant and his wife were 81 and 80 years old, respectively.
Making an effort to follow the correct procedure given his limited computer skills, Mr. E visited the local CB branch on June 30. He expected the staff to guide him through the application process for the policy.
Mr. E alleged that the CB staff failed to inform him about the need to "upgrade" the policy in order to ensure adequate coverage for medical expenses. He left the bank under the impression that he and his wife were appropriately insured, even receiving an email confirmation from the insurer stating that the policy had been activated.
AFCA considered the claimant's assertion that a bank teller, referred to as SH, had assisted him during the application process. Despite Zurich's objections, the ruling ombudsman agreed with Mr. E's account.
The ruling acknowledged that SH had neglected to disclose the requirement to "upgrade" the policy, necessary for the claimant and his wife to have coverage, despite the bank being aware of their age. It stated that although SH's actions were unintentional, CB caused the insured party to believe they had suitable coverage.
"Given CB's knowledge of the complainants' age, this omission should have been disclosed," AFCA stated.
"SH's oversight significantly contributed to Mr. E's unwitting failure to apply for the policy upgrade. Furthermore, this omission induced Mr. E to enter into an insurance contract that he believed provided adequate coverage. However, unbeknownst to him, the policy was essentially useless in terms of overseas medical expense coverage for both him and Mrs. E."
Zurich argued that CB employees were not authorized representatives and thus were unable to offer any advice on the credit card insurance being offered. However, AFCA dismissed this argument as an attempt by the insurer to absolve itself of CB's shortcomings, stating that the bank acted, at least partially, in the insurer's interest.
The decision mandates that Zurich accept the claim and provides a compensation of $4000 ($2000 for each complainant) for non-financial losses resulting from the insurer's claim denial and subsequent challenges.
"Throughout the claims process, the insurer's stance has unfortunately caused the complainants, particularly Mr. E, to feel accused of dishonesty," expressed AFCA.
"They also feel that their recollections have been questioned. Moreover, the insurer's position in this claim has been based on flimsy evidence."
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
In a significant move to address the evolving risks faced by strata communities, CHU Underwriting Agencies has incorporated cyber protection into its residential strata insurance policies. This enhancement provides coverage of up to $50,000 for losses resulting from social engineering fraud, a type of cybercrime where perpetrators impersonate trusted contacts to manipulate payment instructions. - read more
QBE Insurance has unveiled significant enhancements to its commercial landlord insurance offerings, introducing a suite of optional add-ons designed to provide more comprehensive protection for property owners. These strategic enhancements aim to equip brokers with additional tools to better serve their clients in a competitive market. - read more
Blue Zebra, a prominent underwriting agency, has announced a new capacity arrangement for its home building and contents, landlord, and SME package products. The agency has partnered with a co-insurance panel comprising Chubb, AIG, and HDI Global Specialty, marking a significant shift in its underwriting partnerships. - read more
In recent years, Australian agriculture has witnessed a notable shift towards the adoption of autonomous machinery. This trend reflects a broader global movement aimed at enhancing efficiency and productivity in farming operations. However, despite the growing interest, several challenges continue to impede widespread implementation across the sector. - read more
The recently announced 2026-27 Federal Budget has introduced several measures with significant implications for the Australian agricultural sector. These initiatives aim to bolster the industry's resilience and address pressing challenges faced by farmers nationwide. - read more
Life insurance is a crucial part of any comprehensive financial plan, providing peace of mind that your loved ones will be financially secure in the event of your passing. - read more
The horizon of the insurance industry has undergone a transformative shift with the advent of digital technology. With a few clicks, consumers can navigate the once-complex world of insurance policies from the comfort of their home. The digital landscape for insurance services offers unprecedented access to information, comparisons, and instant communication, fostering a more empowered insurance client. - read more
Life insurance is a cornerstone of financial planning, offering peace of mind to you and security for your loved ones. It's a contract between you and an insurance company: in exchange for regular premiums, the insurer agrees to pay a sum of money to designated beneficiaries upon your passing. This vital tool ensures that your family's financial needs can be met during an incredibly difficult time. - read more
Life insurance and estate planning are critical components of financial security. They ensure that your loved ones are protected financially when you are no longer around. By understanding these tools, you can take significant steps to secure your family's future. - read more
When you’re young, life is all about new experiences and making plans for a promising future. While factors like travel, career, and relationships often take centre stage, one aspect often overlooked is life insurance. It might seem like something to consider later in life, but starting a policy while you're young can be a savvy financial move. - read more
Start Here !
Apply now for your free Insurance assessment and price comparisons!
Knowledgebase
Insurance broker: An agent acting on behalf of the insured (not the insurance company) who negotiates the terms and cover provided by the insurer in the insurance policy.
No comments yet. Be the first to share your thoughts.